Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why BroadSoft Inc. Stock Plunged Today

By Steve Symington - May 1, 2017 at 3:59PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the cloud communications technology specialist fell after it missed top-line expectations and lowered its full-year guidance.

What happened

Shares of BroadSoft Inc. (NASDAQ: BSFT) fell as much as much as 11.8% early Monday, then settled to trade down 8.5% as of 3:30 p.m. EDT, after the company announced mixed first-quarter 2017 results and reduced its 2017 revenue guidance.

So what

Quarterly revenue rose 8.9% year over year, to $79.7 million, including a 10.8% decline in license software revenue, 22.6% growth in subscription and maintenance support revenue, and a 26.3% increase in professional services (and other) revenue. On the bottom line, that translated to adjusted net income of $6.2 million, or $0.19 per share, down from adjusted net income of $11.1 million, or $0.37 per share in the same year-ago period.

Analysts, on average, were looking for lower adjusted net income of $0.16 per share on higher revenue of $80.4 million.

Businessman working on a tablet computer

Image source: Getty Images.

BroadSoft CEO Michael Tessler insisted the company is "pleased" with its first-quarter results.

"We made meaningful progress against our 2017 strategic objectives during the quarter," added Tessler. "Our goals for this year are focused on making our service provider customers increasingly successful in addressing the cloud communications opportunity through a combination of product, sales and marketing-based initiatives."

Now what

Looking forward, BroadSoft expects second-quarter revenue of $84 million to $88 million, and adjusted earnings per share of $0.20 to $0.32. Both ranges were below consensus estimates for current-quarter revenue and earnings of $91.7 million and $0.45 per share, respectively.

Finally, BroadSoft told investors to expect full-year 2017 revenue of $380 million to $390 million (down from previous guidance for $390 million to $400 million), and adjusted earnings per share of $2.20 to $2.50 (a reiteration of its previous earnings outlook).

"[F]rom an overall business perspective we remain very positive on our long-term market opportunity," explained BroadSoft CFO Jim Tholen. "Our guidance change is due to a reduction in our professional services and subscription and support revenue expectations."

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/05/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.